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Apple eyes new streaming strategy after Tom Hanks drama breaks records

World War II epic ‘Greyhound’ gave Apple TV Plus its first bona fide hit. Now executives are looking to double down, insiders say, finally making Cupertino a player in the streaming wars.

Apple eyes new streaming strategy after Tom Hanks drama breaks records
[Photo: Apple]

Tom Hanks has shaken things up at Apple.

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According to sources familiar with Apple’s thinking, the success of Hanks’s World War II drama Greyhound (which he both wrote and starred in) has catalyzed Apple’s ambitions in feature films, which are now being amped up to (almost) Netflix-like levels.

Going forward, one source says the streamer is discussing plans to release a dozen new movies a year on Apple TV Plus, roughly one a month. Two to four of those would be blockbuster-type titles such as Greyhound and Emancipation, the runaway-slave thriller starring Will Smith and directed by Antoine Fuqua (Training Day) that Apple recently acquired for $120 million in a bidding war with Warner Bros., Universal, and other studios. Another source had fewer specifics but confirmed that Apple is telling Hollywood that it’s now in the market for more tentpole-like feature films. (Apple would not comment for this story.)

Apple’s greater focus on big films marks a noticeable amplification on its movie front. When the company launched Apple TV Plus to much fanfare and hullabaloo last November, movies were something of an afterthought—unlike its TV strategy, which was crystal clear. Apple made no bones about the fact that it was interested in prestige programming in the form of glossy series along the lines of The Morning Show, populated by A-list stars such as Jennifer Aniston, Reese Witherspoon, Steven Spielberg, and Oprah Winfrey.

Movies, meanwhile, appeared as, at best, an excuse for Apple execs to do the film festival circuit and score invites to awards shows. With movies, the company appeared to be stealing a page from the Amazon playbook by investing in smaller, arthouse films that could win Golden Globes and Oscars and drum up publicity while burnishing Apple’s premium brand. The company made a deal with A24, the studio behind the Oscar-winning Moonlight, to produce a slate of films for the service. But Apple also shelled out big-time for a Christmas musical with Will Ferrell and Ryan Reynolds.

What was the company’s point of view, exactly? As one film agent puts it, “They’re more confusing than Netflix. I know what Netflix wants and doesn’t want. [Apple hasn’t] come out to the agencies and said, ‘We need these kinds of movies.’ I think they’re much more specific on the TV side.” 

Then came Greyhound.

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In case you haven’t heard, the film, which delighted couch-surfers with its painless running time of 90 minutes (Hanks also seems to be a kind of comfort food during a global pandemic), became Apple TV Plus’s biggest hit when it launched on July 10. Although Apple, of course, wouldn’t divulge numbers, Deadline reported that the film “turned in a viewing audience commensurate with a summer theatrical box office big hit.” Beyond being the biggest opening weekend ever for Apple TV Plus, 30% of those who watched it were new subscribers. 

The breakthrough was much needed. Although Dickinson, a series starring Hailee Steinfeld as Emily Dickinson, was a stand-out at launch and  The Morning Show has garnered wins on the awards circuit and is expected to receive Primetime Emmy nominations next week, the first eight months of Apple TV+ has seen lukewarm releases that have mostly disappeared without making a ripple in the culture.

Building a slate

The other films on Apple’s more robust slate would be a combination of festival acquisitions and mid-range titles. It’s not clear how many of those would be acquisitions like Greyhound, which Apple bought from Sony for $70 million when the studio decided to pull back on its theatrical release due to COVID-19. But given the production limitations that persist due to the pandemic, the company is very open to acquisitions, according to sources.

What Apple offers legacy studios sitting on films they can’t release in theaters (namely, those without streaming services, so Paramount, Sony, MGM, and Lionsgate, as well as smaller players such as STX, Anonymous, and Annapurna) is a guaranteed payday. Studios that might be wary of alienating movie theater chains for when they do reopen—or who are just reticent to test the still-unpredictable premium video-on-demand business—can turn to Apple and offload films with virtually no immediate downside.

Even before Greyhound became a phenomenon, Apple was starting to beef up its film slate and wade into tentpole waters. In May, the company partnered with Paramount on the $180 million adaptation of the David Grann best-seller Killers of the Flower Moon, which Martin Scorsese will direct and which stars Robert DeNiro and Leonardo DiCaprio. And there was the Will Ferrell-Ryan Reynolds musical version of A Christmas Carol.

But Greyhound, says one source, “put clarity around the idea that they can do these bigger movies.” 

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Boutique, not big box

The idea, to be clear, is not to become Netflix. “They don’t want to be Costco,” says another source. “They want to be very curated.” But expect to see the company more aggressively bidding for big titles, particularly as more and more studios start offloading movies that won’t be able to be shown in theaters any time soon.

Indeed, Apple’s shift exemplifies the opportunities that COVID-19 is creating in the most tumultuous moment in the history of the movie business. (Even during World War II, production continued, and movies were not only shown in theaters but robustly attended.) As studios navigate their own crisis moments due to the effects of the pandemic and the fact that production is on hold and theaters aren’t opening—just this past week Warner Bros. moved Tenet off its intended summer release date for the umpteenth time, and for the first time didn’t put it back on the calendar—streamers are stepping up to bat.

Netflix has scooped up movies from STX, and Disney took its own filmed version of Hamilton off the theatrical release track and threw it on Disney Plus, generating buzz and driving up subscriber numbers over the July Fourth weekend. 

For Apple, in particular, the new flood of potential film acquisitions is incredibly advantageous, even necessary, to help grow the service, which, according to a Wedbush analyst Dan Ives, has an estimated 30 to 40 million subscribers. He notes, however, that the “vast majority” of those are getting Apple TV+ for free via a promotion. (At last count, Netflix had 193 million globally.) The service currently has over 30 original shows and movies. But unlike its competitors—Netflix, Hulu, Disney Plus, Peacock, and HBO Max—it has no back catalog of old TV shows and movies on Apple TV Plus to keep people watching once they finish an original series or movie. Apple has been offering a free, one-year trial for Apple TV Plus for anyone who buys a new Apple device, but how long can that promotion continue? Once all new subscribers have to actually pay, Apple is going to need fresh, original content to offer them. There have been reports that Apple has been in talks with MGM about acquiring its rich library—which includes the James Bond franchise—but no deals have been announced. There have also been reports about Apple buying the rights to other older movies and TV shows, but no titles have surfaced.

A service that offers a theater-quality film at home for just $5 a month (compared with the typical $20 premium vide0-on-demand price tag) might look pretty good to a lot of consumers looking to be entertained and stretch their budgets a little further. Never more so than during COVID-19, when audiences are being trained to watch summer blockbusters such as Greyhound in their living rooms, simply because there’s nowhere else to see them. Ditto for films such as Hamilton and the Andy Samberg romantic comedy Palm Springs, which Hulu said netted more hours watched over its first three days in early July than any other film on Hulu during the same period.

If anything, Apple could be even more ambitious. Two to four blockbusters a year feels rather cautious given the world’s pent-up demand for new movies to stream—as well as Apple’s ample resources to outbid just about anybody for them. The fact is, if Apple wanted to blow Netflix out of the water, it could.

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But hold tight. This is, after all, Apple. As one source says of the new movie plan, “If this works, no doubt they’ll go bigger.”

This article has been updated to reflect the following changes: a more recent Apple subscriber estimate, and context around The Morning Show. The word “pivot” to describe Apple’s movie strategy was also changed to “amplification.”    

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About the author

Nicole LaPorte is an LA-based senior writer for Fast Company who writes about where technology and entertainment intersect. She previously was a columnist for The New York Times and a staff writer for Newsweek/The Daily Beast and Variety

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